Rand Exchange Rate Today: GBP ZAR Rate Firms, Rand Trades DOWN vs Pound, Euro & US Dollar

October 8, 2014 - Written by Admin

STORY LINK Rand Exchange Rate Today: GBP ZAR Rate Firms, Rand Trades DOWN vs Pound, Euro & US Dollar

The British Pound to Rand exchange rate - GBP ZAR - traded within a narrow range on Tuesday, with Sterling eking out a modest advance.

South African President Jacob Zuma announced this week that Lesatja Kganyago will be appointed as Governor of the South African Reserve Bank (SARB) when Gill Marcus steps down in November.

Marcus has been hailed as having a highly positive influence on the South African economy and investors are hoping that the new Governor will be able to continue restricting consumer price growth.

Where does the ZAR trade on the forex markets?

The Pound to Rand exchange rate is converting +0.08 pct higher at 18.02643 GBP/ZAR.
The Euro to Rand conversion rate is trading up +0.11 pct at 14.19672 EUR/ZAR.
The US Dollar to Rand exchange rate is 0.16 per cent higher and converts at 11.21553 USD/ZAR.

Industry expert Jonathan Myerson commented: ‘If he’s going to be more hawkish than the current Governor... investors are going to be happy. It’s going to give security around inflation concerns, so it’s a good thing.’

Kganyago offered some Rand support when he made a statement that he would continue with Marcus’ work, keeping the current monetary policy trajectory stable. Kganyago said: ‘It is a continuum that we have seen since Ms Marcus arrived at the bank in 2009 and I do not have to reinvent anything, I just have to carry from where she had left.’ Moreover, the appointment will keep investors happy who had hoped that the new Governor would be a current member of the reserve bank.

UK Figures Ease Interest Rate Hike Debate

In the UK, interest rate hike optimism has been quelled yet again by weak data. UK Manufacturing Production only managed to grow by 0.1% in August following July’s 0.3% expansion. In addition, Industrial Production failed to advance at all on the month. When the UK economy was showing rapid signs of improvement, debate over when borrowing costs would increase became heated. However, Tuesday’s statistics are unlikely to support interest rate hikes in this week’s Monetary Policy Committee (MPC) meeting. At present, the UK benchmark interest rate resides at the 0.5%.

Recent research by the Money Advice Service (MAS) has shown that UK interest rate hikes will see over half of home owners struggle to pay their mortgages.

70% of homeowners said they were already struggling financially and increases to borrowing costs at present would see them stretched to find additional mortgage repayments.

The Council of Mortgage Lenders commented on the situation saying: ‘If people take some sensible, practical steps now, most will be able to cope with what the Bank of England [BoE] has previously flagged as a likely ‘baby steps’ trajectory of rate rises, whenever they finally come.’

Rand to Pound Exchange Rate Softens on Forex Drop

Meanwhile, the Rand softened after Tuesday revealed an unexpected dip in South African Foreign Exchange Reserves.

September saw a dip to $49.13 billion, from the former $49.767 billion. Economists had only predicted a slight fall to around $49.47 billion.

The Rand softened versus the US Dollar (USD) as investors cashed in gains from the previous trading session.

Thursday will see the release of August’s South African Mining and Manufacturing Production figures. July saw Manufacturing Production contract by -3.6% and economists are presently forecasting a -0.7% fall to take place in August.

Other things to watch out for on Thursday will be the Bank of England’s Rate Decision. However, any hawkish central bank remarks could push the UK currency higher.

Other Relevant Rand Exchange Rates Today:
The South African Rand to Euro exchange rate is trading down -0.1% at 0.07044 ZAR/EUR.
The South African Rand to Pound Sterling exchange rate is trading down -0.09% at 0.05547 ZAR/GBP.
The South African Rand to US Dollar exchange rate is trading down -0.17% at 0.08916 ZAR/USD.

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TAGS: Daily Currency Updates Dollar Pound Forecasts Pound Rand Forecasts Forecasts